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Everything you need to know before buying real estate is included in our Portugal Property Pack
Thinking about buying a 3-bedroom apartment in Chiado? It’s a great area, but you're probably wondering: is now the right time to buy, or should you wait for prices to drop?
And what about long-term investment—should you look into other neighborhoods like Alfama or Bairro Alto where property values might appreciate more over time?
In this article, we’ll answer these questions. We know this market quite well - and we have put all our knowledge in the Portugal Property Pack.
Will property prices increase in Portugal in 2025?
Yes, property prices in Portugal are expected to rise in 2025, driven by a combination of high demand and favorable economic conditions.
Backed by our fresh, in-depth market analysis, we’re confident that Portugal remains an attractive destination for both domestic and international investors.
While there are some economic challenges like inflation and potential interest rate hikes, the main drivers behind Portugal’s price growth are expected to persist.
Demand, especially in popular areas like Lisbon and the Algarve, continues to outpace supply, making significant price drops unlikely. Additionally, Portugal's appeal as a tourist and expatriate destination continues to attract buyers from around the world.
Signals pointing to a property price increase in Portugal
Here are some factors suggesting prices could increase:
The ongoing popularity of Portugal's Golden Visa program is expected to continue attracting foreign investors, particularly from non-EU countries, thereby increasing demand for property in 2025.
Portugal's stable political environment and favorable tax policies for expatriates and retirees are likely to sustain interest from international buyers, supporting property price growth.
The limited availability of new housing developments, especially in high-demand areas, is expected to keep supply tight, contributing to upward pressure on prices.
Portugal's growing reputation as a tech and startup hub is attracting young professionals and entrepreneurs, increasing demand for urban housing, particularly in Lisbon and Porto.
The country's strong tourism sector, which is expected to recover and grow further in 2025, will likely boost demand for short-term rental properties, driving up prices in tourist hotspots.
Improved infrastructure and transportation projects, such as new metro lines and airport expansions, are expected to enhance connectivity and increase property values in affected areas.
The trend of remote working is encouraging more people to relocate to Portugal for its quality of life, climate, and cost of living, further increasing demand for residential properties.
Signals pointing to a property price decrease in Portugal
Here are some factors suggesting prices could fall:
Potential increases in interest rates could make mortgages more expensive, reducing affordability for some buyers and potentially cooling demand.
Economic uncertainties, such as inflation and global market volatility, could impact consumer confidence and spending power, leading to a slowdown in property purchases.
Stricter regulations on short-term rentals, particularly in tourist-heavy areas, could reduce the attractiveness of investment properties, potentially impacting demand and prices.
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If property prices go up in Portugal, how much would they increase by?
If real estate prices in Portugal were to rise in 2025, the increase would likely be around 3% to 7% of their 2024 values.
Typically, real estate in dynamic markets like Portugal appreciates by approximately 3% to 7% annually over the long term. However, fluctuations can occur depending on factors such as region, season, and property type.
It means that, if you spot a charming 2-bedroom apartment in Lisbon for 300,000 euros today, don't be surprised if it's priced between 309,000 and 321,000 euros this time next year.
To give you a better understanding, here is a table that shows 7 types of Portuguese real estate properties, their estimated prices in 2024, and projections for 2025 based on potential price increases of 3%, 5%, and 7%.
| Type of Property | Average Price in 2024 (€) | Price in 2025 (3% increase) | Price in 2025 (5% increase) | Price in 2025 (7% increase) |
|---|---|---|---|---|
| Traditional Apartment (60 sqm / 646 sqft) | €250,000 | €257,500 | €262,500 | €267,500 |
| Modern Apartment (75 sqm / 807 sqft) | €350,000 | €360,500 | €367,500 | €374,500 |
| Luxury Villa (100 sqm / 1,076 sqft) | €800,000 | €824,000 | €840,000 | €856,000 |
| Studio (30 sqm / 323 sqft) | €150,000 | €154,500 | €157,500 | €160,500 |
| Loft (80 sqm / 861 sqft) | €400,000 | €412,000 | €420,000 | €428,000 |
| Townhouse (150 sqm / 1,615 sqft) | €600,000 | €618,000 | €630,000 | €642,000 |
| Investment Property (50 sqm / 538 sqft) | €200,000 | €206,000 | €210,000 | €214,000 |
Everything you need to know is included in our Property Pack for Portugal
If real estate prices go up in Portugal, which areas are likely to see the biggest increases?
Today, people who want to move to Portugal are looking for the charm of its historic cities, but they also want modern conveniences and vibrant social scenes, which Lisbon's Bairro Alto delivers. Hence, we could see a price increase there in 2025.
Also, lately, there's been a shift toward more youthful, vibrant neighborhoods, and Porto's Ribeira has really taken off.
We like it when information is clear and easy to digest. So, here’s a table that highlights the areas where prices might rise the most, along with the reasons behind those expected increases. It’s very high-level. If you want more details on a specific area, please check our real estate pack tailored to the Portuguese market.
| Neighborhood | Level of Increase | Why |
|---|---|---|
| Bairro Alto, Lisbon | High | Recent development of luxury housing projects and its increasing appeal to international buyers as travel normalizes post-pandemic, driving demand. |
| Chiado, Lisbon | High | Expected rise due to limited housing stock, upcoming renovations to heritage buildings, and growing demand for prime properties in central Lisbon. |
| Alfama, Lisbon | Medium-High | Ongoing gentrification and new transport links, along with several planned redevelopment projects in the area, are likely to push prices higher. |
| Parque das Nações, Lisbon | Medium | The shift towards hybrid workspaces is driving demand for residential properties near business districts, combined with new mixed-use developments. |
| Campo de Ourique, Lisbon | Medium-High | Eco-friendly urban projects and recent construction of new schools and parks are increasing its attractiveness for families, pushing prices upward. |
| Ribeira, Porto | High | Upcoming large-scale urban regeneration projects and improved public transport access are expected to make this area more desirable. |
| Foz do Douro, Porto | Medium-High | Its proximity to the ocean, along with new office and residential developments, makes it increasingly attractive to professionals seeking more space. |
| Baixa, Porto | Medium | Gentrification and cultural regeneration projects are attracting new residents, leading to rising prices as the area becomes more fashionable. |
| Cascais | High | As new luxury developments are launched, demand for premium housing among wealthy buyers is expected to further increase property values. |
| Sintra | High | Upcoming restoration of historic sites and high-profile cultural projects are driving a renewed focus on this scenic, historic location. |
If I'm looking to invest in real estate, what types of properties should I focus on for the best value appreciation?
In 2025, Portugal real estate trends focus on tech-smart, energy-efficient apartments, larger suburban homes for families, properties with outdoor spaces, and eco-friendly buildings—all driving higher demand and prices. Here is a summary.
- Tech-Equipped and Energy-Efficient Apartments:
Driven by remote work and sustainability trends, these homes offer smart technology features and energy-saving systems. They cater to young professionals and tech workers, making them a hot commodity in 2025, especially in cities like Lisbon and Porto.
- Family-Sized Apartments in Suburban Areas:
With a growing demand for larger living spaces, especially among families, suburban areas near Lisbon and Porto are seeing increased interest. Proximity to green spaces, beaches, and schools is a major factor driving value.
- Properties with Outdoor Spaces:
Post-pandemic, outdoor spaces like terraces, balconies, or gardens have become highly desirable. In cities like Lisbon, these features offer a much-needed escape and are likely to drive up property values.
- Eco-Friendly Buildings with Low Carbon Footprints:
Portugal's commitment to sustainability is boosting demand for eco-certified buildings. Buyers are increasingly valuing properties that align with the country's green goals, leading to price appreciation in this category.
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